Clarence Weatherspoon, a super salesman contemplating retirement on his fifty-fifth birthday, decides to create a fund on an 8% basis that will enable him to withdraw $20,000 per year on June 30, beginning in 2018 and continuing through 2021. To develop this fund, Clarence intends to make equal contributions on June 30 of each of the years 2014-2017. a) How much must the balance of the fund equal on June 30, 2017, in order for Clarence Weatherspoon to satisfy his objective? b) What are each of Clarence's contributions to the fund?
Clarence Weatherspoon, a super salesman contemplating retirement on his fifty-fifth birthday, decides to create a fund on an 8% basis that will enable him to withdraw $20,000 per year on June 30, beginning in 2018 and continuing through 2021. To develop this fund, Clarence intends to make equal contributions on June 30 of each of the years 2014-2017. a) How much must the balance of the fund equal on June 30, 2017, in order for Clarence Weatherspoon to satisfy his objective? b) What are each of Clarence's contributions to the fund?
Chapter20: Corporations And Parterships
Section: Chapter Questions
Problem 8DQ
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Transcribed Image Text:Clarence Weatherspoon, a super salesman contemplating
retirement on his fifty-fifth birthday, decides to create a
fund on an 8% basis that will enable him to withdraw
$20,000 per year on June 30, beginning in 2018 and
continuing through 2021. To develop this fund, Clarence
intends to make equal contributions on June 30 of each
of the years 2014-2017.
a) How much must the balance of the fund equal on June
30, 2017, in order for Clarence Weatherspoon to satisfy
his objective?
b) What are each of Clarence's contributions to the fund?
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